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Rants & Ravings

Staff -- Purchasing, 10/6/2005

Diversity stops at the gates

Regarding "The changing face of supplier diversity" (August 11, 2005), does the typical corporate board reflect the same goals as the supplier diversity programs? It appears that in most instances the diversification programs end at the gates of the golf club, with few exceptions.

Andrea L. Agazim, Glenview, Ill.

A tip on the "Tips"

In your Logistics column "10 surefire Logistics tips" (August 11, 2005), Tip #3 should never have been printed.

First, the idea that a logistics manager, or even a supply chain manager has the right to remove a package from the receiving department that is not destined for them violates every procedure and common-sense guideline I have ever seen. Even worse is [John] Brockwell's [of JP Morgan Chase Vastera] attitude that such removal is "educational."

Purchasing and materials management or production management may have a number of reasons for expedited freight. Especially in a build-to-order environment coupled with a JIT delivery process, where the combination of leadtime and distance can dictate that a given part or order must ship priority, that determination falls to the buyer. No one who is not involved directly with the process of manufacturing for sale has any business interfering.

I regularly ship three-day from any supplier outside the West Coast. There are two reasons for this. The most important factor is tracking. With standard ground shipping, neither the consignee nor the shipper can actually see any more than that a package might have been picked up, and should be delivered on a given date. The only point-to-point scans are for the three-day select and above, in the case of UPS. Second is the ability to receive long-lead items on time, when order dates allow limited time for delivery to production.

It is also quite common for sales or production to expedite a build, either to accommodate a customer request or for workload and throughput issues. Again, no one outside of production or materials has any authority to interfere with that process, and are not even usually in the loop for information about expedited orders.

If one follows Mr. Brockwell's advice and removes the package, here is the chain of events set in motion at this company. The failure to receive is noted by the buyers after reviewing the log and the online screens showing receipt to PO and transfer to inspection. The buyer has to contact the shipper and either get a tracking number, or wait for the vendor to track. Once it is shown that the package was signed for, the buyer has to go back to receiving to find out where the package is.

Scott King Crandall, Senior Buyer, CXR/Larus

(Editor's note: Following is the response from the author of the tip, John Brockwell of JP Morgan Chase Vastera: "Mr. Crandall brings up several good points about why expedited freight is often the best solution. The tip I provided was based on experience. A well-respected distribution manager that I worked for at a large multinational high-tech company [in a JIT environment] performed this exercise regularly with the full support of his management, the materials manager and the plant manager. The fact that he's now happily retired and playing golf vs. having been skinned alive in his job is a testament to his knowledge of the business and the fact that he often selected items that were one-offs (prototypes, samples, and nonproduction supplies). Premium freight can be an emotional topic for many companies. Practical experience tells us that considering premium freight in the overall context of customer satisfaction, total landed costs, inventory carrying costs, and profit margins leads to fact-based decisions vs. emotional and sweeping 'eliminate all premium freight' types of edicts.")

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